The number of households on the waiting list for social housing in Dorset has gone up by more than 7%, the National Housing Federation has found.

In a report published earlier it revealed that in 2011 there were 26,087 households on the list, up from 24,341 in 2010.

The federation found south-west England had seen the largest increase in the country.

Managers said it was a symptom of a housing crisis.

Jenny Allen from the federation said: "High house prices, rising rents and the fastest growing waiting lists in the country - these symptoms of the housing crisis are having a huge impact on people across the South West."

Pension funds

Martyn Pearl, housing service manager for West Dorset District Council, said demand for affordable homes in west Dorset "continues to rise because of the high cost of alternative forms of housing".

"High numbers of older and infirm households, often on fixed incomes, and households in low-paid employment are often unable to afford to buy or rent privately."

He said this had been exacerbated by reductions in grants for new homes.

The government is considering whether to allow local government pension schemes to invest more in new homes.

Currently they can spend a maximum of 15% of the £150bn available on homes, roads and other forms of infrastructure.

Ministers have suggested extending this to 30% which would take the largest possible investment from £22.5bn to £45bn.

A report published last month by the Future Homes Commission, set up by the Royal Institute of British Architects, said a possible 100,000 to 300,000 homes could be built in the UK every year using council pension funds.